Australia’s home-building approvals drop

The number of Australian home building permits have dropped in December to give back part of a sharp surge in November.

Approvals to build or renovate houses and apartments declined by 1.2% from November, and fell by 11.4% from a year earlier, the Australian Bureau of Statistics said Thursday.

November saw building approvals rise by 7.5%.

Permits to build houses fell by 1.6% from a month earlier, while approvals for apartments and other dwellings rose by 0.9%.

Australian housing construction is starting to slow after a number of boom years, but so far the cooling has been slow.

This week, Commonwealth Bank of Australia announced a forecast for 2017’s new dwelling construction of 212,000, which compares with 2016’s 225,000 new dwellings and 2015’s record level of 226,000.

The major drivers of construction–population and house price growth–should moderate only slightly over 2016, it added.

State divergences will be a feature of 2017, with Melbourne and Sydney apartment construction at record levels, CBA said.

It forecast national house price growth of 5% in 2017 mainly because of modest household income growth. That compares with a rate of around 10% now.

Source: MarketWatch